Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.

Tweet us @Fides_Search to let us know your thoughts.

This week:

1. Reputational damage eradicates law firm 

It has been announced this week that offshore firm Mossack Fonseca will be shutting down its operations following the backlash from the ‘Panama Papers’ scandal.

In April 2016, Panamanian law firm Mossack Fonseca suffered a major data breach, sparking a number of concerns globally around the lack of sufficient cybersecurity measures in law firms. The breach consisted of around 11.5 million leaked documents that implicated and compromised over 200,000 offshore clients. Several well-known names emerged from the documents, including former British Prime Minister David Cameron, European football body Uefa and the King of Saudi Arabia.

As a brief explanation as to why the upcoming closure will take place, the firm released the following statement:

“The reputational deterioration, the media campaign, the financial siege and the irregular actions of some Panamanian authorities, have caused irreparable damage, [resulting in the] total cessation of operations to the public at the end of this month after 40 years”.

A year after Panama Papers, we witnessed news of further law firm cyber attacks, with fellow offshore firm Appleby’s suffering a data breach that was announced in October 2017, and DLA Piper enduring the infamous WannaCry ransomware attack in June 2017.

As we continue to build on lessons learned from the above cases in the legal sector, and not to mention the soon to be enforced general data protection regulation (GDPR) coming into play on 25^th May, cyber security should remain top priority for senior management. If the Panama Papers scandal has proved anything, it is that a lack of understanding around the reputational risk related with cybercrime can be fatal.

Mossack Fonseca has said it will retain a small number of staff to handle the requests from authorities and other public and private groups.

2. Transforming Company Culture Key to Regulatory Success according to FCA Discussion Paper

On Monday the FCA published its discussion paper “Transforming Culture in Financial Services”. This attributes conduct failings since the financial crisis, which have caused harm to both consumers and markets, on poor company culture rather than individual ‘bad apples’.

Given the impact and role culture plays in rebuilding trust in financial services, this is now a priority for the regulator, with the paper presenting views from industry leaders, academics and practitioners on how to transform culture within the sector, and act as a basis for debate on how to drive sustainable culture change.

The paper which comprises a collection of essays has been grouped under four themes, a summary of which can be found below:

1). Is there a ‘right’ culture?

• Culture is about behaviour, and is defined by the norms, values and practices with which people think and behave

• A consumer-focused culture makes firms more attractive to potential customers and talented employees, which, in turn, increases firms’ profits. This is necessary for economic success.

• There is no single ‘right’ culture, but instead a number of factors that healthy cultures have in common, such as adaptability, integrity, an emphasis on quality and supportiveness and risk management

• “A good culture means more than ensuring that good people don’t do bad things – it is about enabling good people to do even better things,” as summarised by Banking Standards Board’s CEO, Alison Cottrell.

2). The role of regulation

• It is in firms’ interests to critically self-assess the impact of the day-to-day management and governance on their culture, rather than to take a narrow legal interpretation of the ‘rules’.

• Regulators should aim to ‘assess’ culture by asking the right questions, in a bid to determine whether members understand their organisation’s mission and values and to elicit how such values are lived day-to-day.

• It is not enough to rely on rule making and enforcement – regulators around the globe are moving away from strictly using rule-based methods and incorporating behavioural science for assessing, understanding and influencing behaviour

3). The role of rewards, capabilities, and environment in driving behaviours

• Many previous attempts to change culture have focused on extrinsic incentives and disincentives such as changes to remuneration, targets and sanctions, but positive psychology and intrinsic motivations (i.e. receiving praise and status, maintaining a moral identity or conforming to a crowd) can be equally strong, yet overlooked motivators.

• The importance of environment is critical; good people do bad things. The tone needs to be set from the top as well as by key influencers such as middle management.

• It is not enough to rely on traditional incentives and levers to create a positive culture. The levers of wider motivation should also be used alongside role models and speak-up arrangements that allow employees to raise concerns in a way that fosters psychological safety

4). Leading culture change

• While senior leaders play a key role in influencing culture – and should be held to account for cultural failings – everyone influences the culture they are in, from middle managers to the most junior employees

• For culture change to take effect, influencers must embody desired behaviours and not pay lip service to them

• Organisations need to set a clear values statement on culture. This involves identifying and collaborating with stakeholders, defining and communicating what the organisation stands for and using this to set expectations and design processes

• Employees need to feel ownership to truly invest in new values, so firms also need to balance culture change from the top with a ‘bottom up’ local approach

• As such, financial institutions must consider a more complex, multi-system approach to influencing culture and behaviour. While there remains an important role for senior leaders, influence happens at all levels of an organisation, with the challenge then to recognise and align all levels of the system.

What next?

In short, the discussion paper highlighted three key findings:

• That there has been a shift to a more dynamic, systems-based approach to thinking around culture and conduct which encapsulates the individual, the whole system around them and the interactions and inter-dependencies between each part in the system.

• That it is important for organisations to foster psychological safety and learning as a means for employees to speak up, collaborate, and innovate.

• That regulation in its current form can only go so far in improving culture.

The full discussion paper Transforming Culture in Financial Services (DP18/2) can be found here.

Movers & Shakers of the week 

Panel Watch

Credit Suisse confirms its global legal panel, replacing the previous EMEA and UK panels, which is expected to run for two to three years

Appointments

LeapFrog Investments searches for a new general counsel as it is announced Linklaters’ corporate head Stuart Bedford will be returning to his post at the firm

Moves

W&C rebuilds City PE practice with Jones Day hire

Private equity partner Mike Weir has left Jones Day to join White & Case in London

A&O targets growth in Jo’burg with team hire

An 11-lawyer team, including four litigation partners, have left Baker & McKenzie’s Johannesburg office to join Allen & Overy in the region.

Kirkland strengthens London restructuring team

Kirkland & Ellis has hired four restructuring lawyers in its London office, joining from Milbank Tweed Hadley & McCloy, Freshfields Bruckhaus Deringer, Norton Rose Fulbright and Orrick Herrington & Sutcliffe. Milbank’s former senior associate Matthew Czyzyk will join the firm as a partner.

Mergers & Alliances

Dentons continues global expansion by combining with seven law firms in Kenya, Mauritius, Cayman Islands, Barbados, Indonesia and Malaysia

Office Openings & Closings

Lewis Silkin set to launch Dublin office opening

Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.

This week:

1.) Vanquis agrees to pay £2m fine; shares rise

Things are beginning to look up for credit card lender Vanquis, as it agrees to pay an FCA fine and compensation to its customers, drawing a line under a seven month-long investigation by the regulator.

Vanquis Bank, a subsidiary of lender Provident Financial, is due to pay £1.9m for failing to disclose the full price of repayment option plans (ROPs), an add-on product that allowed borrowers to freeze repayments on their credit card debt temporarily. Vanquis will also pay back the interest customers were charged on this product, worth £169m.

Director of enforcement and market oversight at the FCA Mark Steward commented that: “Most Vanquis customers chose the ROP to help manage their credit without realising instead that the product might lead to their indebtedness increasing.

“Vanquis has decided now to do the right thing by acknowledging the wrong-doing and offering to compensate its customers.”

This news follows a bleak year for Provident, who suffered a major blow to its financial results in 2017. It reported a pre-tax loss for the year of £123m, after having posted profits of £344m the year before. The lender also lost its chief executive and cancelled a dividend for shareholders during the same period, which saw it undergo one of the largest share price falls ever seen in the London market.

After such a turbulent year, settling the regulatory probe by the FCA into Vanquis has proved positive for Provident. It was also announced on Tuesday that Provident will launch a £300m rights issue, which further confirmed a turnaround period for the company, and caused a massive share price rise of 70 per cent on Tuesday.

Whilst a further regulatory investigation remains open on Provident, namely its subsidiary Moneybarn’s car financing product, recovery for the lender looks promising as it succeeds in rebuilding its levels of investor confidence.

2.) Bryan Cave Leighton Paisner to go live in March

Berwin Leighton Paisner secured its transatlantic merger this week, as partners voted through its consolidation with US firm Bryan Cave on Monday.

The combined firm – Bryan Cave Leighton Paisner – will house 1,600 lawyers with offices in 32 cities across 11 countries, and become one of the 50 largest firms in the world with combined gross revenues of around $900 million. When the new firm goes live on the 31^st March, it will represent 191 clients in the Fortune 500 and 30 of the world’s 50 largest banks.

The merger builds on many commonalities between the two firms. Aside from strong practices in M&A and Real Estate, Bryan Cave Leighton Paisner will also become the first firm to be led by two women – Bryan Cave’s chair Therese Pritchard and BLP’s managing partner Lisa Mayhew, who will become co-chairs of the new firm.

Both firms have also been recognized for their innovative approaches to legal service delivery. Launched in 2007, BLP’s Lawyers on Demand was the original legal outsourcing business, and now stands at 600 lawyers, whereas Bryan Cave’s BCX Component offers expertise in data analytics, software programming and project management to clients in order to provide more efficient legal services.

The firm will also be fully financially integrated to incentivise the sharing of work between partners. “Clients will benefit from our combined legal expertise; our shared values and culture and our approach to innovation in their interests,” said BLP’s Lisa Mayhew. “Different to most other international firms, ours will be fully financially integrated from day one. This will enable us to work in teams whose only focus will be to provide a first class service to clients.”

Baker McKenzie also announced this week that it is to integrate eight of its EMEA offices – including London – into a single profit pool, in a step towards greater financial integration of the firm, which has been criticised in the past for its loosely-combined ‘franchise’ model.

3.) Movers & Shakers

Appointments

Clifford Chance expands global leadership team

Irwin Mitchell recruits first General Counsel

Ladbrokes Coral general counsel to take control of larger legal team when GVC takeover is complete

Karen Seward becomes global head of Litigation at A&O

London partner Perry Yam appointed to co-lead Mayer Brown’s global corporate and securities practice

Moves

Macfarlanes sees rare partner exit as fund finance head leaves for Reed Smith

Macfarlanes investment fund finance head Bronwen Jones has left the firm after 14 years to join Reed Smith’s London office

Ashurst builds City IP practice

Ashurst hired former Clyde & Co intellectual property (IP) head David Wilkinson for its London disputes team.

DLA Piper launches fund offering in Paris

Corporate partner Benjamin Aller joins the firm from asset management consultancy MJ Hudson.

Mergers & Alliances

BLP and Bryan Cave partners approve transatlantic merger

Office Openings & Closings

DLA Piper’s former France managing partner quits firm to launch M&A boutique

Partner Promotions

Latham London lawyer makes the cut in 16-strong round of counsel to partner promotions

Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.

This week:

1). Bank financial results: All you need to know

Bank financials are coming through thick and fast, with a number of global banks posting their earnings for the year, and receiving a mixture of shareholder responses.

Here is a round-up of the all the results posted this week:

RBS

• Pre-tax profit 2017: £752m (compared with £6.95bn loss in 2016)

RBS reported its first annual profit in 10 years. Chief exec Ross McEwan labelled it a symbolic moment, which was however shadowed by the potentially massive fine the bank still awaits from the US justice department (DoJ) over the sale of financial products linked to risky mortgages. RBS were expected to reach a settlement by end of 2017, without which the government cannot begin to sell down its stake in the bank. Shares in the bank fell 4% in early trading.

Barclays

• Full year loss 2017: £1.92bn (compared with £1.62bn loss in 2016)

Barclays posted a hefty loss on Thursday of 1.92bn, whilst revenues fell 2%. The loss is largely attributed to one-off costs the bank incurred, £127m of which was due to the Carillion collapse. Barclays also lost £2.5bn on the sale of Barclays Africa Group and a £900m charge related to changes in US tax rules. Excluding these, the bank pre-tax profit would reach £3.5bn. Also lying in wait are numerous legal and regulatory obstacles, which include: an SFO investigation into Qatar loans; a DoJ investigation into poor quality of loans; and an FCA investigation into Jess Staley for his handling of a whistleblower.

Barclays is expected to more than double its dividend payout to shareholders next year to 6.5p a share, causing its share price to rise by 4% in early trading.

Lloyds

• Pre-tax profit 2017: £5.3bn (compared with £4.2bn in 2016)

Another strong financial performance for Lloyds last year, with increased profits, strong capital generation and increased capital returns. Having returned to full private ownership in 2017, the bank announced a share buy-back of up to one billion pounds and is now focused on its strategy to lead the technological advancements of the banking sector. Lloyds has committed to investing £3bn in creating a ‘digitised’ bank, with a simplified and progressive modernisation of its data and IT infrastructure. Lloyd’s shares were up 1.6 percent in early trading.

Metro

• Pre-tax profit 2017: £10.8m (compared with £16.8m loss in 2016)

Metro Bank has reported its first ever annual profit since its inception in 2010. Revenues rose 51 per cent to £293.8m and its loan book grew 64 per cent to £9.6bn. Chief executive Craig Donaldson is optimistic about the results: “We’ve reported our first full year of profitability, had continued exceptional growth in both deposits (47%) and lending (64%), and have the privilege now of looking after over one million customer accounts.”

Unfortunately Metro Bank’s growth had a negative effect on its capital ratio, with its common equity tier one ratio falling from 18.1 per cent to 15.3 per cent. The FT reported that this raises the prospect of a share issue this year and in turn, the bank’s shares dropped 7 per cent in early trading.

HSBC

• Pre-tax profit 2017: £12.3bn (compared with £5.1bn in 2016)

HSBC’s pre-tax profit for 2017 has more than doubled to £12.3bn compared with £5.1bn the year before, due largely to the absence of hefty restructuring costs the bank had incurred in previous years. However, HSBC didn’t quite reach its estimates, with projections for the year’s profit forecasted at £14.1bn. A big hit to the lender’s bottom line was the controversial US tax reforms, which also affected Barclays’ results, and led to a $1.3bn charge for HSBC.

HSBC are in a good position as CEO Stuart Gulliver hands his post over to John Flint this week, with Asia accounting for the bulk of its global profits and acting as a key driver for future growth. Shares fell 3.7 percent in early trading.

2). Barclays end law firm panel reviews

Barclays is about to embark on its last ever panel review, as the bank introduces a system that will see external legal advisors assessed on an ongoing basis.

The bank had its last panel review in July 2016, where it cut its roster by 60% and handed two-year appointments to 140 firms.

Under the new system – based on ‘active relationship management’ – law firms will be able to be added and removed to the bank’s panel on an ad hoc basis.

Following the 2016 review, Barclays implemented a number of changes to how it manages it’s relationships with law firms. Most notably, this included the creation of a rating system which graded panel firms on a number of metrics, such as billing rates, service delivery, alternative fee arrangements and feedback from in-house counsel.

The grades – which are currently assessed annually – are not fixed, and firms are encouraged to accept and implement feedback to improve their score.

“Panel refreshes are not supporting what we want to do” said Barclays head of external engagment Stephanie Hamon. “What we really want is our relationships to be a win-win partnership and for us all to develop. If you keep resetting the clock every two years, you can’t really build those relationships.”

Ashurst, Hogan Lovells, Simmons & Simmons, Addleshaw Goddard, Eversheds, Bond Dickinson, DWF and Reed Smith were among those retaining spots on the 2016 panel, which is split into three tiers – panel firm, core specialist firm and specialist firm.

The bank also became the first big UK lender to publish its gender pay gap data, revealing a 48 per cent gap in mean hourly pay between men and women in its corporate and investment bank.

3). Movers & Shakers of the Week

Appointments

Shearman partners elect new managing and senior partners in leadership overhaul

Fried Frank names Kate Downey first City female PE head

Deutsche Börse names former Linklaters partner Michael Lappe as new general counsel

HSF Litigation partner Damien Byrne Hill is to take over as head of disputes for the UK and US, replacing the long-standing Mark Shillito

Moves

Orrick hires City corporate partner from US rival

Orrick Herrington & Sutcliffe has recruited City corporate partner Paul Doris from Watson Farley & Williams, as the US firm pushes forward with plans to ramp up its London corporate presence.

Reed Smith Paris tax team quits for DLA Piper a year after joining from KWM

DLA Piper has hired a three-partner tax team from Reed Smith, just 12 months after they joined from the collapsed European arm of King & Wood Mallesons (KWM). Paris tax partners Sylvie Vansteenkiste, Fanny Combourieu and Raphael Bera all made the move.

Ashurst strengthens IP practice with Clyde & Co’s UK head

David Wilkinson is set to join the Intellectual Property team at Ashurst.

Pinsent Masons hires TMT partner from Bird & Bird in Madrid

Paula Fernández-Longoria becomes the offices second partner

DWF loses entire family law practice as national head exits with 15 lawyers

Team head David Pickering and partner Elspeth Kinder have departed as a team of 15 lawyers and support staff to Manchester-based firm JMW.

Ropes & Gray rebuilds in Hong Kong with Simpson Thacher hire

Jackie Kahng joins Ropes as a Partner in Hong Kong.

Mergers & Alliances

Partner vote approves merger between Andrews Kurth Kenyon and Hunton & Williams

Office Openings & Closings

Berwin Leighton Paisner closes Myanmar office after 4 years

Partner Promotions

London partner promotions at leading US firms rise 30%

Financials

Latham makes history as first firm to hit $3bn revenue barrier

Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.

This week:

1. Clifford Chance acquires Carillion’s low cost arm in Newcastle 

Clifford Chance (CC) has acquired the legal services arm of collapsed construction giant Carillion, known as the Carillion Advice Service (CAS).

The firm is taking on 60 paralegals in Newcastle, who will create a new UK low-cost centre for CC and continue to be led by Director Lucy Nixon.

She will report to new London managing partner Michael Bates and Oliver Campbell, the firm’s head of client services solutions. Campbell also leads Clifford Chance’s legal support centre in India, which launched in 2007

However, the deal does not include the 10 CAS staff employed in Telford to carry out insurance claims handling work.

CAS was 75% owned by Carillion Construction, one of the six Carillion companies to have entered liquidation. As well as providing support services to Carillion, CAS also had external clients for which it handles routine, low-cost legal work such as contract management, document review and due diligence.

From January 2013, Carillion’s 12 panel firms were also mandated to use CAS for commoditised aspects of any work they undertook for the company in order to cut costs.

This included firms such as Slaughter and May, Linklaters, Ashurst, Addleshaw Goddard, Clyde & Co, DLA Piper and Pinsent Masons, with Slaughters offering the services of CAS to Vodafone after a successful trial in 2013.

CC UK managing partner Michael Bates said: “By working with the CAS team, we will enhance our ability to provide extremely cost-effective, efficient and high-quality service on a range of low complexity legal tasks, as an integral part of our overall client offer.”

Global head of client service solutions Oliver Campbell added: “We have been very impressed by the CAS team in Newcastle. They bring a huge amount of expertise in areas that are already an important priority for the firm, such as legal tech and process-driven service delivery.”

Legal Week revealed last month there had been significant interest in the managed services arm, with initially 20 buyers interested in acquiring the business.

Before the collapse of Carillion, CAS had been in the process of applying for an alternative business structure licence. It was acquired by Carillion in 2011, prior to which it was attached to energy services company Eaga.

Carillion filed for liquidation in January after talks with its creditors and the government failed to reach a deal on Carillion’s £1.5bn liabilities.

2. Credit Suisse announces regulatory investigation into hiring practices 

A bribery and corruption investigation has kicked off, with US regulators looking into hiring decisions made by Credit Suisse in the Asia Pacific region.

The Swiss bank made the announcement themselves this week, citing that the probe is investigating “potential violation of the U.S. Foreign Corrupt Practices Act and related civil statutes.”

Both the Department of Justice (DoJ) and the Securities and Exchange Commission (SEC) are working on the case, which will examine whether certain hires the bank have made were in fact referrals from government agencies and other state-owned entities in exchange for investment banking business and/or regulatory approvals.

Credit Suisse is cooperating with authorities in handling this matter.

There have previously been similar cases to this, as JP Morgan in 2016 were fined $264 million for FCPA offenses. Dubbed the “Sons and Daughters Program”, JP Morgan hired approximately one hundred interns and full time employees at the request of government officials in China and other parts of Asia. The revenues generated off the back of these hires was expected to amount to $100 million for the bank.

Similarly in the Middle East, BNY Mellon were accused by the SEC for dishing out student internships to family members of foreign government officials affiliated with a Middle Eastern sovereign wealth fund. $14.8 million was paid as a settlement by the bank.

Movers & Shakers of the week

Panel Watch

Network Rail’s kick offs panel review process, which will see £70m worth of legal services work distributed to law firm advisers between 2019 and 2024.

Currently on the business’ panel are Eversheds Sutherland, Addleshaw Goddard, Bond Dickinson and Dentons

Moves

Linklaters targets Freshfields for employment partner in Germany

Timon Grau will split his time between Duesseldorf and Frankfurt and advise clients on matters such as transactions, internal investigations and restructurings.

Milbank expands capital markets offering with Shearman hires

Milbank Tweed Hadley & McCloy has continued to expand in London with the addition of capital markets partner Rebecca Marques, who joins the firm alongside Shearman’s European and Middle East capital markets head Apostolos Gkoutzinis.

Osborne Clarke hires second private equity partner from Squire Patton Boggs

Partner Alistair Francis joins Osborne Clarke following former UK head of Private Equity Tim Hewens.

Squire Patton Boggs builds energy practice with double city partner hire

Peter Wright and Rinku Bhadoria join the firm from Simmons & Simmons and King & Wood Mallesons respectively.

Norton Rose Fulbright hires new oil & gas partner in London

Poupak Anjomshoaa is to join the London office of NRF from Egyptian energy company Carbon Holdings where she was general counsel.

K&L Gates boosts London investigations, enforcement and white collar practice

Partner Paul Feldberg joins K&L Gates from Willkie Farr & Gallagher where he was a counsel

Memery Crystal hires employment partner from White & Case

Employment partner Stephen Ravenscroft joins Memery Crysal, where he will work with a cross-sector of UK and international businesses on HR issues.

Simmons & Simmons boosts London employment practice with Eversheds Sutherland hire

Employment partner Fiona Bolton established and led the specialist financial institutions sector employment team at Eversheds, and her clients include Citi, Goldman Sachs, HSBC and Lockton.

Simmons & Simmons expands Milan office

Simmons has expanded its Milan office with the hire of a three-lawyer team from Baker McKenzie. Dispute resolution partner Leonardo Giani is set to join the firm to lead its Milan insurance litigation team next month along with two associates.

Weightmans expands corporate practice in London with Reed Smith hire

Weightmans has hired corporate partner Oliver Harker from Reed Smith in London. He was promoted to partnership at Reed Smith in 2017, and last year he acted for miner Gemfields in connection with its takeover by Pallinghurst Resources.

King & Wood Mallesons (KWM) continues to build European offering in Germany

King & Wood Mallesons (KWM) has expanded in Frankfurt with the hire of tax partner Markus Hill from US firm McDermott Will & Emery.

Macfarlanes gains innovation head

Global and European head of technology and innovation Mike Rebeiro is set to join Macfarlanes as the firm’s new senior adviser and head of digital and innovation

Simmons stays focused on Dublin with two further hires in Ireland

Simmons & Simmons is adding partners Niamh Ryan and Elaine Keane to its asset management and investment funds practice in Dublin. They both join from A&L Goodbody

GC at Deutsche returns to Cleary

Christof von Dryander has returned to Cleary Gottlieb Steen & Hamilton as senior counsel in Frankfurt having spent six at years at Deutsche Bank, where he served as general counsel for Germany and Central and Eastern Europe.

Hill Dickinson streamlines its offering by selling off part of its insurance business

17 partners and 311 staff from Hill Dickinson’s insurance business group have been sold to Keoghs, delivering the firm a new Liverpool base, whilst also bolstering its capability in Manchester and London.

Premiere Foods announces GC exit

General counsel and company secretary Andy McDonald has left Premier Foods to join construction group Interserve. He will also sit on the business’ executive board.

Addleshaws makes a play for eight-strong construction team

National construction head Paul O’Kane and Manchester head Paul Barge have both left DWF, along with six further lawyers, to join Addleshaw Goddard in Manchester

MoFo builds London finance practice with magic circle hire

Caroline Jury will be joining the London office of Morrison & Foerster having retired from Clifford Chance’s partnership last year.

Addleshaws strengthens financial regulation practice

Paull financial services regulatory head Lorna Finlayson and Eversheds Sutherland consumer finance partner Clare Hughes will join the Addleshaw Goddard’s Edinburgh and London offices, respectively

King & Spalding concentrates growth on London special matters team

King & Spalding makes additional hire to its special matters team in the City with Berwin Leighton Paisner’s corporate crime and investigations head Aaron Stephens

Freshfields looks to DoJ for next US hire

Former director of  the Department of Justice Eric Mahr joins Freshfields Bruckhaus Deringer in the firms DC office and US antitrust practice

Mergers & Alliances

DWF launches Turkey offering through local alliance with Özkan Law

Office Openings & Closings

Clydes launches Hamburg office

Clyde & Co opens second German office after Dusseldorf, hiring a four partner team from insurance and shipping rival Ince & Co. Ince’s former head of English law Daniel Jones will be joining, as well as its head of admiralty and energy Eckehard Volz. Partners Tim Schommer and Volker Lücke will also join Clydes in Hamburg.

DWF sets up in Doha

BLP to launch in Southampton with double partner hire from Womble Bond Dickinson

Berwin Leighton Paisner (BLP) is launching its third UK office in Southampton with the hire of two partners from Womble Bond Dickinson.Real Estate partners Anna Robbins and Verity Waington will join BLP later this year, with the office launch planned for May.

Hello and welcome to the Fides Weekly Update! Take a look at this week’s key trends, moves and developments in legal and compliance.

Tweet us @Fides_Search to let us know your thoughts.

This week:

1). The Fed stunts Wells Fargo growth and orders the bank to improve risk and compliance functions

Last Friday marked an end to Janet Yellen’s stint as chair of the Federal Reserve, on which day she ordered Wells Fargo to replace four members of its board and barred the bank from further growth “until it sufficiently improves its governance and controls.”

By the end of last year, Wells accumulated $1.95 trillion in assets. In a rare move by any regulatory body, the Federal Reserve has demanded that the bank cannot surpass this figure until it proves to have made adequate changes to its lacking governance and controls measures.

It has been estimated this growth cap will cut profits by $300 million this year, with S&P already downgrading the bank, and consequently losing a ratings advantage it had over both JPMorgan Chase and Bank of America.

The reasons for such serious restrictions on Wells Fargo have been highlighted by the Federal Reserve: “The firm did not have an effective firm-wide risk management framework in place that covered all key risks. This prevented the proper escalation of serious compliance breakdowns to the board of directors.”

These breakdowns were brought to light when it was discovered 3.5 million fake accounts had been created in the names of customers, which allowed employees to artificially hit internal targets, and left customers with unauthorized fees and charges.

The bank reached a $190 million settlement for this scandal with the Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and a Los Angeles prosecutor in September 2016.

Wells Fargo has responded, stating that it is confident they can satisfy the listed requirements. Within 60 days, the bank will submit a plan outlining the improvements made on its firm-wide compliance and operational risk management programme, and has committed to replacing three current board members by April and a fourth board member by the end of the year.

2). Leading Chinese Law Firm to Open in London

AllBright Law, one of China’s largest full-service law firms, is to open its first international representative office in the City of London next month.

Through an agreement with UK firm Bird & Bird, AllBright will launch its London presence on the 15^th March with around 90 partners relocating from its Chinese offices. The delegation will join Bird & Bird’s City office at New Fetter Lane.

The purpose of the office is to enable both firms to work together effectively on joint business development mandates, as well as allowing AllBright to service cross-jurisdiction work in Europe.

AllBright senior partner Guo Zhongqing said: “AllBright has been more cautious in globalisation compared to some of our competitors. We are responding to the urgent demand from our clients, who need a network of foreign lawyers in different jurisdictions.”

AllBright posted revenue of $272.5m (£205.7m) in 2016, placing the firm in fifth place in The American Lawyer’s China top 40. Its firmwide lawyer count that year was 1,661 behind Dentons, King & Wood Mallesons and Zhong Lun.

Bird & Bird already has a significant presence on the ground in the Asia-Pacific region, with three offices in Beijing, Shanghai and Hong Kong, in addition to bases in Japan, Singapore – where it has an association forming Bird & Bird ATMD – and Sydney.

The firm also has cooperation agreements with domestic firms in South Korea, Indonesia and Malaysia and a formal association with Chinese firm Lawjay Partners, through which it offers PRC law.

3). Movers & Shakers

Appointments

Norton Rose Fulbright elects first female EMEA chair

Moves

Two more partners exit Jones Day in London

Corporate partner Dan Coppel and financial institutions regulatory partner John Ahern depart for Morrison & Foerster and Katten Muchin Rosenman respectively

Freshfields Germany partner trio leave with team of associates to found public law spin-off

Berlin public affairs head Wolf Spieth, Duesseldorf environment and regulatory partner Herbert Posser, and Berlin disputes partner Benedikt Wolfers leave the Magic Circle firm to establish public law boutique.

Gibson Dunn finance partner exits for GC role at private equity fund

Gibson Dunn & Crutcher global co-head of finance Stephen Gillespie has left the firm’s City office to join private equity house LetterOne.

Ashurst boosts Asia banking practice with duo from A&O and Fangda

Ashurst has boosted its Asian banking and finance practice with the hires of Fangda Partners partner Eric Tan and Allen & Overy (A&O) counsel Daniel Lau.

CMS Competition partner joins Simmons & Simmons in London

Satyen Dhana joins the EU, Competition and Regulatory practice at Simmons & Simmons

Kirkland hires Latham’s private equity star in New York

Latham & Watkins’ global co-chair of private equity Jennifer Perkins is to join Kirkland & Ellis

Office Openings & Closings

Linklaters opens fifth German office in Hamburg to focus on Banking work

Ashurst becomes fourth firm to launch in Shanghai Free Trade Zone

Orrick becomes the latest international law firm to pull out of Moscow

Partner Promotions

Fried Frank promotes first City lawyer in four years

Hello and welcome to the Fides Weekly Update. Take a look at this week’s key trends, moves and developments in legal and compliance.

Tweet us @Fides_Search to let us know your thoughts.

This week:

1. Helping Partners to show that people matter: event overview and survey findings 

In the weeks following the backlash from the Presidents Club scandal, BBC gender pay arguments and #MeToo campaign, our most recent panel event Helping Partners to show that people matter, in collaboration with learning and training provider byrne.dean, could not have come at a more appropriate time.

Using insight from esteemed panellists Monica Burch, Ian Gray and Rodger Parker, the event brought together partners, D&I and HR professionals from some of the UK’s largest law firms to discuss inclusion and wellbeing in the legal sector.

The discussion kicked off with facilitators Victoria Lewis and Richard Martin sharing the findings of a survey produced by Fides in conjunction with the event.

More genuine support from managers and partners was articulated as the greatest change needed to make law firms more inclusive cultures. “How do you demonstrate that you care? It is about a change in behaviour” argued Victoria. “Policy is all well and good, but the policy will not be applied unless you have people demonstrating the right behaviours”.

The recognition by firms, colleagues and individuals that it is both normal and acceptable to struggle at work was another behaviour change advocated by Richard. “There is no shame in finding it hard sometimes. The only shame is not admitting it”. The importance of this was reflected in our survey findings, which revealed less of 50% of respondents thought their partners cared about their wellbeing, with senior associates identified as being the most high risk group.

The discussion then opened up to the panel who reflected on their experiences of inclusion and wellbeing when in senior positions within their firms.

Monica Burch, Chair of The Mentoring Foundation and former Senior Partner at Addleshaw Goddard recounted a time she realised the bias choices she had made within her own litigation team when taking the team out to Christmas dinner. “Looking around the table, I realised that every member of my 10-person team was a woman. My decision, my comfort was reflecting myself back in the way I work.”

Ian Gray, Executive Partner at Eversheds Sutherland reflected on the key lessons he learned when leading the firms’ gender diversity initiative between 2010 and 2016. “We failed to engage the ‘frozen middle’ and convince them of the business impact of retaining maternity leavers” he said when considering the re-launch of the firm’s maternity policy. “One overarching point is to talk about the business benefits, because rightly or wrongly it gets people engaged.”

Finally Rodger Parker, Senior Counsel and former EMEA Managing Partner at Reed Smith, highlighted the importance of role models and the need for any policy to be “led from the top, with a clearly defined objective and sufficient upward-downward communication”. He also noted the impact of just how far the legal services industry was in the investment in the mentoring, coaching, development, training and education of their people.

Questions from the floor then opened up the discussion to address how partners could create the behaviour changes needed to create more inclusive workplaces, and the best ways firms could measure this.

Linking inclusion and wellness to partner remuneration, as well as firms collecting (and delivering) sufficient feedback were considered the greatest components in ensuring future behaviour change. “It’s about establishing values, leading from the front and then measuring them” said Ian Gray. Linking with performance management shows commitment from senior management, and secures buy in from the partnership alongside the understanding as to what they could do to increase their people management. There also needs to be greater courage by leaders and role models to call out poor behaviour, noted Monica Burch, “The leaders of those groups have to be able to have conversations with individuals about behaviour”.

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We thank our panellists Monica Burch, Ian Gray and Rodger Parker, co-contributors byrne.dean and members of the audience for taking the time to make the event such a success. For further information please contact eclews@fidessearch.com

2. EU declines free trade deal with City of London

The City of London’s proposal to sustain free trade in financial services has been rejected by EU officials, increasing the likelihood of restricted access for Britain’s most profitable sector.

The proposal outlines a post-Brexit agreement between Britain and the EU that would allow cross border trade in financial services on the condition that each side preserve regulatory standards in line with the best international standards, as reported by Reuters.

EU officials responded with a clear stance on this subject, affirming that no special agreement will be made that allows the City access to European markets, so long as the UK remains adamant on leaving the single market.

Following this, it seems likely that the result will be an agreement of “equivalence”. That is to say, when passporting rights are not granted, the EU can provide restricted access to certain third-country financial institutions, where such access is limited and can be revoked at any time.

Without a trade deal with the EU, it is likely we could experience an exodus of financial institutions to competitor EU hubs, such as Frankfurt and Paris, which will have a significant impact on the UK’s economy. As Britain’s biggest source of exports and tax revenue, upholding the City’s prominence in financial services is critical to a successful Brexit.

Britain currently hosts the largest number of banks globally as well as the largest commercial insurance market. Approximately six trillion euros (£5.3 trillion), or 37 percent, of Europe’s financial assets are managed in the UK capital, almost twice the amount of its nearest rival, Paris.

Along with the UK’s vulnerability concerning an equivalence agreement, British finance minister Philip Hammond argued that restricting trade will adversely affect the EU as much, if not more so, that the UK. “The risk for Europe is that if it’s not London it will be New York or Singapore,” said Hammond.

He goes on to argue that although institutions are contemplating a change in headquarters, it will be very challenging to reconstruct London’s financial centre in a different jurisdiction: “The idea that you can recreate in Frankfurt, or Paris, or Madrid, or Amsterdam, or Dublin, London’s financial centre is a fantasy – it isn’t going to happen.”

Prime Minister Theresa May has recently returned from a trade visit to China as she continues in her aims of securing post-Brexit deals with the rest of the world.

Movers & Shakers of the week: 

Panel Watch

Charles Russell Speechlys loses out in Cancer Research panel review

Appointments

Novae GC joins payday lender Wonga after company takeover

Boies Schiller London head gains global exec seat in leadership reshuffle

McDonald’s UK general counsel and company secretary Della Burnside joins private client law firm The Burnside Partnership

Rob Miller joins Deliveroo as chief legal officer from software company Improbable

Nationwide Building Society has appointed former Barclays UK general counsel Mark Chapman as its chief legal officer and society secretary

Ropes & Gray appoints Will Rosen as co-managing partner in London

Former Aviva UK GC joins Lombard International Assurance as Europe general counsel

Moves

A&O star hire in NY exits after two years to join Mayer Brown

Allen & Overy (A&O) co-head of leveraged finance Scott Zemser has left the firm after nearly two years for Mayer Brown

Cooley Strengthens London Corporate Team With Skadden Partner Hire

U.S. firm Cooley has bolstered its London corporate team with the hire of M&A partner Michal Berkner from Skadden Arps Slate Meagher & Flom

Clyde & Co expands Washington DC office with the hire of a nine-lawyer insurance team

Partners Doug Mangel, John Hockenbury, Joe Bailey and Alex Karam join Clyde & Co from US firm Shipman & Goodwin alongside five other lawyers.

Office Openings & Closings

LOD launches in Munich for tenth office worldwide

Cooley expands China presence with launch of Beijing base

Welcome to the Fides Weekly Update. Here we provide you with the key new stories of the week in legal and compliance. Don’t forget to scroll down to take a look our regular feature of Movers & Shakers of the week.

Follow us on LinkedIn and Twitter for daily market updates.

1. The rise and rise of Kirkland & Ellis 

Kirkland & Ellis has a solid start to the year as it’s been reported one of the market’s leading rainmakers Eric Schiele has left Cravath and will be joining its partnership ranks in New York.

As the firm maintains the hiring spree following on from last year in a number of its global offices, it seems Kirkland will once again feature heavily in 2018’s lateral hiring market.

As announced on Thursday, after almost 18 years at the firm, M&A partner Eric Schiele has left Cravath Swaine & Moore to join the New York office of Kirkland & Ellis. Having worked on some of the biggest recent M&A transactions, such as Disney’s pending acquisition of assets from 21^st Century Fox worth $52.4bn, and AB InBev’s $123 billion acquisition of SABMiller, he will be a game-changing addition to Kirkland’s already highly-ranked M&A practice.

Schiele is the third Cravath partner to have joined the Chicago-headquartered firm, with fellow M&A partners Jonathan Davis and Sarkis Jebejian joining the firm in 2016 and 2012, respectively.

This level of lateral hiring is commonplace for Kirkland & Ellis, and the activity of its London office is no different. Towards the end of last year, the firm made a high profile private equity hire with Freshfields’ PE partner David Higgins, who joins Kirkland as London co-managing partner. Government enforcement partner Marcus Thompson joined the firm’s partnership in London in August as part of a five partner-strong enforcement team hire made from Ropes & Gray, whilst fellow Ropes associate James Board joined Kirkland as a funds partner two months later. Other key hires in the City for Kirkland involve Linklaters’ real estate M&A rainmaker Matthew Elliott and Freshfields finance partner Michael Steele in 2015.

Not only has the firm bolstered its partnership numbers through lateral joiners, but Kirkland also recorded its largest ever promotions round in 2017. A total of 97 lawyers were appointed to its partnership, and 13 in the City. Naturally, given the firms specialisms, most new London partners were posted in its M&A and private equity practice, whilst the firm chose make a number of additions in tax and investment funds also.

This significant investment comes in the wake of a turbulent few years at Kirkland with multiple partner defections across their network resulting in changes to their partnership and questions about their standing amongst the global elite. It remains to be seen whether the sizeable sums being offered, that have been reported to entice a number of market leading partners, will prove well spent.

Finding the balance between leaders and rainmakers in the firm being committed to the firm, above and beyond remuneration, is something Kirkland will need to discover.

2. Senior adviser at the Investment Association calls out FCA for an “absolute dereliction of the duty of care” to consumers

A piece of regulation key to the retail investment market has been labelled “the worst piece of financial regulation ever in Europe”, with a senior member of the funds industry demanding that “heads should roll” at the regulator in response.

In a letter to FCA chief exec Andrew Bailey, Philip Warland wrote that this year’s new European legislation for Packaged Retail and Insurance-based Investment Products (Priips) fails in its duty to consumers by skewing performance projections and offering investors misleading data.

Seasoned funds figure Philip Warland is the former senior public policy adviser at Fidelity International, and previously served as director general of the Investment Management Association (now the Investment Association (IA)). Having stepped down from his post at Fidelity early last year, Warland is now in an advisory role at the IA, and has written this letter in response to an attempt by the FCA to introduce new guidance on managing the Priips legislation.

“Heads should roll in the FCA, in [the European Securities and Markets Authority] and in the [European] Commission,” wrote Mr Warland. “This is by far the worst piece of financial regulation ever in Europe and the FCA is complicit.”

The aim of the PRIIPs is to encourage efficient EU markets by helping investors to better understand and compare the key features, risk, rewards and costs of products.

However, as James Anderson from the Henderson Smaller Companies trust explains: “some firms are concerned that…the ‘performance scenario’ information required in the [Priips documentation] may appear too optimistic and so has the potential to mislead consumers.”

A spokesperson for the IA has also commented on the new regulation: “Performance scenarios and the way charges and transaction costs are presented are exceptionally difficult for customers to understand. What is needed is an urgent, early review in order to fix these problems.”

The FCA has yet to comment on the above criticisms.

Movers & Shakers of the week

Appointments

Helena Chen and Sam Boyling have been appointed co-heads of Pinsent Mason’s China practice, replacing Hew Kian Heong who joined Herbert Smith Freehills last year

Arbitration partner Thomas Sprange QC becomes the new London managing partner for King & Spalding

Former deputy head of the attorney general’s office Stephen Parkinson will become senior partner of Kingsley Napley

Moves

Mayer Brown’s Asia banking capabilities grows with A&O hire

Allen & Overy partner Kayal Sachi and counsel Ian Roebuck have left the firm to join Mayer Brown JSM in its Singapore office. Both will join as partners.

Milbank adds another partner to its City finance team

European head of capital markets Apostolos Gkoutzinis leaves Shearman & Sterling to join Milbank Tweed Hadley & McCloy as a partner in London.

Commercial law duo set to join Morgan Lewis

Partner Georgia Quenby and of counsel Victoria Thompson move to Morgan Lewis & Bockius from Reed Smith

Eversheds Sutherlands grows in Dubai with team hire

Reed Smith construction disputes partner Paul Taylor joins the Dubai office of Eversheds Sutherland. Fellow team member Roberta Wertman joins as a legal director and another associate.

HFW makes a play in Singapore with three partner team hire

Holman Fenwick Willan has made three partner hires in Singapore, with former managing partner and finance partner Siri Wennevik joining from Wikborg Rein, energy partner and former Southeast Asia head Alistair Duffield from Berwin Leighton Paisner and corporate partner Ivan Chia from Watson Farley & Williams.

Office Openings & Closings

US firm Troutman Sanders closes outfits in Hong Kong, Beijing and Shanghai

Mergers & Alliances

DAC Beachcroft secures tie-up in Hong Kong with local firm Oldham Li & Nie (OLN)

Hello and welcome back to the Fides Weekly Update. Here are the key news stories of the week in your industry. As always, scroll down to find our regular feature of the Movers & Shakers of the week

Follow us on Twitter and LinkedIn for more regular market updates.

This week:

1. US feds charge another trader for FX manipulation 

On Tuesday this week, Barclay’s former head of New York Foreign Exchange trading was charged for illegal practice known as “front-running”, in relation to HP’s takeover of Autonomy.

Ex-Barclays head Robert Bogucki is indicted of six counts of wire fraud, and one count of conspiracy. Along with the help of two unnamed individuals, Bogucki is accused of using his knowledge of options orders purchased by HP, in preparation for the company’s takeover of software company Autonomy in 2011.

Commonly termed “front-running”, he is claimed to have misused this information by having trades executed ahead of purchasing HP’s options, in order to profit the bank at HP’s expense.

Bogucki is the third Barclays trader to be involved in a forex scandal, and the latest in a string of criminal charges filed by the DoJ following a crackdown by the US prosecutors. Here is a list of charges made in 2017:

• Mark Johnson, former global head of forex cash trading at HSBC, faced allegations in September 2017 of front-running a $3.5bn currency deal by Cairn Energy. It emerged today that HSBC has agreed to pay $101.5m in settlement payments while Johnson awaits sentencing.

• Christopher Cummins, a foreign exchange dealer for Citigroup, pleaded guilty in January 2017 to conspiring to rig currency rates from 2007 to 2013.

• Cummins’ plea deal came a week after ex-Barclays trader Jason Katz became the first person in a global investigation to admit to manipulating FX prices.

• Additionally in January 2017, three British-based currency traders were charged by US prosecutors for allegedly manipulating the price of US dollars and euros. Richard Usher, Rohan Ramchandani and Chris Ashton, who each worked at JP Morgan, Citigroup and Barclays respectively, used electronic chat rooms, in which they called themselves ‘The Cartel’ to share information. They each pleaded not guilty in July last year.

Movers & Shakers of the week

Panel Watch

Yum! Brands launches first European legal panel

Vodafone updates legal panel for first time since 2014

Appointments

Linklaters’ director of technology Matt Peers has been promoted to become its first chief operating officer

Asian capital markets head William Liu set to become new head of China at Linklaters

Moves

Deutsche Bank associate GC returns to private practice

Deutsche Bank North Asia Pacific associate general counsel Catherine McBride has joined Latham & Watkins’ Hong Kong office as a partner in the white collar defense and investigations practice and the financial institutions group

Ropes & Gray loses another City partner

Finance partner Matthew Cox departs Ropes & Gray in London to join Baker McKenzie

A&O strengthens German PE capability

Nils Koffka, former co-head of private equity in Freshfields Bruckhaus Deringer’s Hamburg office, is joining the private equity practice at Allen & Overy

Milbank confirms team hire from US competitor

Milbank Tweed Hadley & McCloy has taken a four partner finance team from Cadwalader Wickersham & Taft, including global financial restructuring co-chair Yushan Ng. Partners Jacqueline Ingram, Karen McMaster and Sinjini Saha will join Ng.

Latham makes a play for Hogan Lovells duo

Latham & Watkins has hired co-head of global financial services litigation Jon Holland, and banking litigation partner Andrea Monks from Hogan Lovells to join its litigation and trial department in London

Co-op’s former GC secures role at British Land

Brona McKeown, former general counsel for The Co-operative Bank has joined British Land as general counsel and company secretary

Ropes & Gray hires longstanding CC partner

Clifford Chance white-collar crime partner Judith Seddon will be joining Ropes & Gray’s London office as a partner and co-head of its London international risk practice

Mischon de Reya boosts corporate practice

Mischon de Reya has hired Addleshaw Goddard partner Tim Field as head of equity capital markets

Clydes bolsters global insurance practice

Mandip Sagoo and Angus Duncan both exit Mayer Brown’s insurance practice to join Clyde & Co in the City

Mergers & Alliances

DLA Piper makes new alliance with local firm Amer Al Amr Law Firm in Saudi Arabia, as the firm’s Saudi managing partner departs

Charles Russell Speechlys prepare to merge with boutique sports firm Couchmans

Office Openings & Closings

US firm Littler Mendelson furthers European expansion with fourth European office to be based in Milan

Squire Patton Boggs opens a new office in Atlanta with three-partner Dentons team hire

Partner Promotions

Withers makes eight-strong promotions round, with two in the City

Hello and welcome back to the Fides Weekly Update. Here are the key news stories of the week in your industry. As always, scroll down to find our regular feature of the Movers & Shakers of the week

Follow us on Twitter and LinkedIn for more regular market updates.

This week:

1. MiFID II watch: A week in progress…

It’s been ten days since the Markets in Financial Instruments Directive (MiFID II) came into force, introducing a host of regulatory reforms that aim to inject transparency and investor protection across financial markets.

Although it hasn’t been a seamless process of implementation, critics argue there haven’t been as many bumps in the road as expected. That being said, we’ve been monitoring the news around the latest piece of regulation, and listed below all of the key developments to be recorded since the beginning of the New Year.

Last minute reprieves

Regulators kicked the first day of MiFID II with a last-minute reprieve granted to three clearing houses in the UK and Germany until July 2020.

Intercontinental Exchange (ICE), the London Metal Exchange (LME) and Deutsche Boerse’s Eurex Clearing arm will not have to comply with open access rules for exchange-traded derivatives, with the Financial Conduct Authority (FCA) explaining that the requests for waivers had been granted to ensure “orderly functioning of the trading venues.”

The open access rules under MiFID II are intended to provide investors with the option to trade and clear products at different exchanges.

The regulator has decided to agree on implementing a transitional agreement with the exchanges.

Dark pools still active

This week was supposed to introduce a hard hit to dark pools – private venues run by certain financial institutions where securities can be traded outside of public platforms.

These regulatory enforcements have been delayed, with the European Securities and Markets Authority (ESMA) claiming that it didn’t have sufficient data to work how best to introduce caps on dark pool trading.

Dark pools can present disadvantages for public investors as prices are hidden on dark pool trades until after completion, by which point the public investor is in a worse trading position.

In order to remedy this without prohibiting dark pools, which are important tools for institutional investors to carry out sizeable trades, regulators have decided to cap the total amount of trading that can take place per individual stock in a dark pool.

These volume caps are expected to be published in March this year.

ICE loses energy futures contracts

Commodity exchange ICE has announced it will shift 245 futures and options contracts in North American oil and natural gas liquids from ICE Futures Europe to ICE Futures U.S. next month.

It has been speculated the transfer is due to MiFID II requirements, and the FT reported some traders have closed positions on ICE and opened equivalent one on the Chicago Mercantile Exchange (CME), in an attempt to avoid the European regulation.

Boost in electronic trading and credit markets

Multi-dealer trading venue Tradeweb has reported a surge of investors trading on electronic platforms as they seek to comply with the more stringent regulatory requirements.

The Thomson Reuters majority-owned platform said European credit market volumes (i.e. corporate and financial bonds) surged 70 percent over the daily average in 2017 whilst the number of European interest rate swaps was up over 104 percent from the daily average volume.

Enrico Bruni, head of Europe and Asia business at Tradeweb, has said the platform has seen an increase in electronic trading of mandated products under MiFID II, which they believe is a likely to be investor attempts to meet new reporting requirements.

2. First law firms disclose gender pay gap 

This week saw the first UK law firms publish data on their gender pay gaps ahead of the April deadline for gender pay reporting regulations in the UK.

Introduced last year, businesses with over 250 employees are required to provide information on four key measures to show any discrepancy between male and female pay, as well as an action plan as how to increase equality within their organisation.

Table 1: Hourly Rate

*The mean is the average difference in pay when the full earnings distribution of an organisation is taken into account. By identifying the wage of the middle earner, the median is the best representation of the ‘typical’ gender difference.

CMS was the first firm to report, showing a 17.3% pay gap in hourly rate. However, this jumped to 32.8% when the median figure was taken, showing a greater level of disparity between male and female pay. The data also showed a 26.9% gap in bonuses, with 90% of female UK staff receiving a bonus compared to 85% of male staff.

Herbert Smith Freehills also published their statistics, revealing a 19% pay gap in hourly earnings which grew to 38.8% when the median figure was taken. The data also revealed a 30% pay gap in bonuses, with 77% of women receiving a bonus compared to 71% of men.

However, Shoosmiths reported more encouraging results with a 15.4% average pay gap (below the UK average), with a median pay gap of 13%. An 18% pay gap was found in bonuses, with 94% of men receiving a bonus compared to 92% of women.

Table 2: Pay Quartiles

*The proportion of men and women in each quarter of the employer’s payroll

The distribution of women and men within different types of roles in the firm, particularly in business support teams, and the high numbers of part-time female workers are reasons attributed to the gender pay gap in legal. All firms have a disproportionate amount of women in the lower and lower-middle pay quartiles, taking the female pay average down. For example, in accompanying data released by HSF, the mean pay gap at the firm would reduce to 8.8% if the analysis excluded the 22% of women who work in secretarial roles.

CMS and Shoosmiths also register a higher number of women in both the Top and Upper-Middle quartiles, although this is likely to do with an amendment to the legislation which means LLP members, or equity partners, are exempt from the analysis.

Table 3: Bonus Pay

Whilst perhaps representative of the remuneration practices at law firms yet to be reported, any disparity in pay towards female workers is far from ideal. With the national median gender pay gap at 18.4%, law firms have some way to go to address the inequality in their organisations. Despite this, the gender pay reporting regulations serve as an important benchmark going forward for law firms to assess the effectiveness of their inclusion, retention and remuneration policies and reduce inequality in their organisations.

We are currently conducting some research on the barriers to inclusion and wellbeing in the legal sector. Please take 5 minutes to fill out this short survey. Thank You! 

Movers & Shakers of the week

Panel Review

BNP Paribas for first global panel review in six years

Appointments

David Patient is reappointed managing partner at Travers Smith for his second three-year term

Hogan Lovells has selected its first German partner Leopold von Gerlach to become global chair of the firm

Private client partner Sebastian Prichard Jones is set to replace Charles Martin as senior partner in April 2020

Moves

Former Spanish PM exits DLA’s board

Jose Maria Aznar, who was Prime Minister of Spain from 1996 to 2004 has stepped down from his position on DLA Piper’s global board, and is suggested to be joining former colleague Juan Picon at Latham Watkins, who acted as former senior partner and global co-chair for DLA.

CC boosts US offering with litigation hire

Celeste Koeleveld is set to join the litigation and dispute resolution team in Clifford Chance’s New York office. She joins from the New York State department of financial services where she was previously general counsel and a member of the senior executive team

Squire Patton Boggs makes double energy hire in London

Energy partners Peter Wright and Rinku Bhadoria have both joined the London office of Squire Patton Boggs from Simmons & Simmons and King & Wood Mallesons, respectively.

Sedgwick’s London head moves in-house

Edward Smerdon has become the new head of legal and technical for Aon, after Sedgwick confirms it will cease operations this month

Office Openings & Closings

Norton Rose Fulbright has closed its Abu Dhabi and Kazakhstan offices

Weil Gotshal & Manges shuts down operations in Budapest, with its 20-lawyer team joining Bird & Bird

Partner Promotions

Reed Smith promotes 23 to partnership, five in London

Happy New Year and welcome back to the Fides Weekly Update! Here is the first round-up of key news in legal and compliance this year – don’t forget to scroll down for the Movers & Shakers of the week.

Follow us on Twitter and LinkedIn for more market updates

This week:

1. Deutsche staff get a good start to the New Year

After a year of heavy cost-cutting measures and lacklustre payouts at Deutsche Bank, it seems this year will start off with a bang as the bank’s top boss declares higher bonuses and pay rises are on the cards.

As reported in the FT earlier this week, chief executive at Deutsche Bank John Cryan, in an interview with Germany’s Börsen-Zeitung newspaper, admitted that for the first time since his leadership at the German bank, they intend to “return to our normal compensation programmes”.

Deutsche is planning to wait until the investment bank’s financials are reported and bonus figures have been allocated by competitor institutions, for which it is speculated Goldman Sachs usually delivers first and sets the benchmark.

Although staff members aren’t expecting mammoth salary and bonus figures this year, especially as the investment banking division has seen a drop in market share in recent years, compensation is expected to be a serious boost compared to 2016, where performance-related bonuses were cut by as much as 80% across the bank.

More to come on financial postings and bonus figures in the coming weeks.

Movers & Shakers of the week

Panel Watch

Metro Bank adds nine new firms to its lending and securities panel

Appointments

Ex-Slaughters lawyer joins Inflexion as first General Counsel

Andrew Stevens is to become the first General Counsel of private equity house Inflexion.

Weil appoints two partners to lead Asia operations as managing partner steps down

Tim Gardner and Charles Ching with manage the US firm’s Asia operations following the retirement of Akiko Mikumo.

Moves

White & Case bolsters UK Corporate practice with Linklaters hire

Daniel Turgel joins White & Case from Linklaters where he was a senior associate.

Linklaters boosts Washington DC presence with Bankruptcy hire

Linklaters has expanded its Washington DC office with the hire of Jones Day bankruptcy partner Amy Edgy.

Simmons hires CMS London IP partner for group launch

Intellectual property partner Kevin Cordina joins Simmons & Simmons, reuniting with former head of legacy Olswang’s European patent litigation team Michael Burdon who moved to the firm last year.

K&L Gates takes three-partner energy disputes team from Ince & Co.

The trio includes former global energy head Jeremy Farr, Charles Lockwood and Clare Kempkens.

Mergers & Alliances

Eversheds Sutherland seals full merger with Dutch network firm

Partner Promotions

Hogan Lovells makes up five in London in biggest global partnership round for six years

Akin Gump promote one in London in 15-strong round